Germany yesterday agreed to give a 30-million euros ($34 million) loan to Cambodia to upgrade the country’s electrical grid and enhance access to power outside urban centres.
The loan will be disbursed by the Climate Technology Initiative of Germany’s Ministry of International Development, and will be implemented by KfW, Germany’s development bank, according to the press release.
Ambassador Ingo Karsten said that the loan will enhance access to reliable and environmentally friendly energy, which will be a key aspect of the country’s development in the future.
“A more efficient grid infrastructure is both good for the planet and the people. It increases energy efficiency, access in remote areas and allows for lower tariffs. Stronger grids are necessary for future investments in solar energy, which has a huge potential in Cambodia,” he said.
Speaking during bilateral government consultations on development cooperation yesterday, Keo Rottanak, managing director of Electricité du Cambodge (EDC), said the loan will be used to expand electricity coverage to more people outside urban centres. He said it will lower the cost of electricity for many families living in the countryside, while also reducing the use of diesel fuel.
“We expect that this project will reduce the use of diesel, which pollutes more. This project will makes the grid greener, opening the door to cleaner energies like solar panels.
“We believe that this project is good for the environment, rural households, women and health education,” he added.
A spokesman for the German Embassy in Phnom Penh told Khmer Times that the German government will issue a formal statement committing to the loan next week. He said the signing ceremony will take place after all conditions of the loan have been negotiated.
The duration and the interest rate still needs to be negotiated between the Cambodian Ministry of Economy and Finance and the implementing agency, KfW, he added.
“The project will fund the construction of two substations in Siem Reap province, one in south Siem Reap and one in Kralanh district.
“It will also fund the extension of a medium-distribution grid in the rural areas of Kampong Thom, Preah Vihear, Siem Reap and Oddar Meanchey to reduce losses and allow for additional energy access,” he said.
The project is schedule to begin in 2020 and is expected to be finished within two years.